Property-cooling measures to deter speculators have started to bite, with home sales involving corporate buyers plunging about 70 per cent in the past 10 months. The number of such transactions dropped from an average of 778 a month before the measures were introduced to an average of 217 a month since November last year - the first month after the introduction of additional stamp duty of 15 per cent on purchases by corporate and non-permanent-resident buyers, according to a document submitted to the Legislative Council. "It shows the extra stamp duty has been very effective in curbing speculation," said Patrick Chow Moon-kit, head of research at Ricacorp Properties. The number of flats sold to companies fell to 2,392 in the past 10 months, from 7,782 between January and October last year, according to the paper, which quoted Inland Revenue Department data. Such deals accounted for 4.4 per cent of the 54,964 made in the 10-month period to September this year, against 9.7 per cent of the 80,349 transactions for January to October last year. Sammy Po, a director at Midland Realty, said overall demand had dropped since cooling measures were introduced. "Most potential buyers are staying on the sidelines because they fear a further fall in prices," he said. In the market for luxury homes - those costing more than HK$12 million - there were 607 sales in the third quarter, the fewest since the 351 deals recorded in the last quarter in 2008 when the global financial crisis had just hit the financial and real estate markets, Centaline Property Agency says. "The top-end residential sector has been severely hit by the extra stamp duty," said Centaline, pointing out that most buyers of luxury homes were either using corporate names or were mainland buyers. Po expects sales of luxury homes to improve sightly as developers have started to offer steep discounts. Sun Hung Kai Properties is today offering the remaining 60 flats at its luxury residential project The Cullinan at Kowloon Station at a 20 per cent discount to prices of pre-occupied flats there. The developer will also offer a 70 per cent subsidy on the extra stamp duty for corporate and overseas buyers. Last week it released a price list for 181 flats at The Cullinan with an average selling price of HK$29,098 per square foot of saleable area.
